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The following letter from Intel to its channel partners is self explanatory. It includes information about up and coming price cuts, the big shortage of Pentium IIIs in February, the move to FC-PGA and the shipping of Intel Pentium IIs to the channel.

"January 18, 2000

"This is a notice to inform you of the current availability outlook for the Intel boxed processors sold through authorized distribution channels. This outlook statement is based on current expectations - it is forward looking and actual results may differ. We recommend that system integrators contact their authorized distributors for specific availability and pricing information.

"Pending completion and validation of a new thermal solution, the boxed version of this processor is expected to begin shipping later in the year. Boxed processors ship with a high quality thermal solution in the box. The exact ship date for the boxed processor is planned to be communicated at a later date. Boxed versions of the Intel Pentium III Xeon processor 733, 667 and 600 MHz are shipping in the channel now.This information is based on current expectations and is subject to change without notice.

"Intel® Pentium® III Processors
Supply for Pentium® III processors continues to be tight vs demand. We are continuing to ramp production on the .18 micron manufacturing process as quickly as possible but Pentium III processor supply will be very limited on both .18 micron (prior code name: Coppermine) and .25 micron (prior code name: Katmai).

"Pentium III processor supply will be especially limited in the February, 2000 time frame.

"Transition to Flip Chip-PGA Package
Intel started a fast transition from the SECC2 to FC-PGA package beginning with the introduction of the Intel Pentium III processors 550 and 500 MHz on October 25, 1999. This transition will accelerate in Q1'00. We expect the Intel Pentium III processors in Flip Chip-PGA package to ramp very quickly. At the start of Q1'00, the Flip Chip-PGA package will be the volume package on the lower priced Pentium III processors and by the end of Q1'00 the Flip Chip-PGA package will be the volume package for all Pentium III processors in the distribution channel. Customers are advised to rapidly transition to the Flip Chip-PGA package to take advantage of the supply availability & flexibility of this package. Intel plans to introduce additional Pentium III processors in January'00 in the FC-PGA package up to 750MHz, with additional speeds to follow. The FC-PGA package offers system integrators several key benefits:

"a.. Greater platform flexibility. Both Intel Pentium III processors and Celeron processors can be used in boards specifically designed to support both processors

"Intel is now shipping CA810E desktop boards to support Pentium III processors in FC-PGA package and is planning additional board offerings. Other motherboard vendors are also shipping socketed boards that support Pentium III processors in FC-PGA package. For more information about boards and slot-to-socket adapters go to the Technical Center on the IPD Net located at: http://program.intel.com/ibp/techcenter/

"Pentium III Processors 750 and 800 MHz
On December 20, 1999 Intel launched the Pentium III processors at 800MHz and 750MHz for desktop PCs. Initial shipments of the 750 MHz processor into the distribution channel (box and tray) are expected to begin in early January '00. Shipments of the 800MHz processor into the distribution channel (box and tray) are expected to begin later in Q1'00.

"February 27, 2000 Price Move
There will be a significant price move on Intel® Pentium® III and Celeron™ processors on February 27, 2000 as Intel transitions to higher performance levels. Intel hopes that through providing advanced notice of this price move, we will help our customers to better manage inventory levels. We expect that supply in the March time frame will improve to support the increased sales activity prompted by the February 27 price move.